AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)
Markets

FTSE 100 rises after BoE's new rescue measures, midcaps stuck in the red

The central bank cut interest rates to 0.1%, its second emergency rate cut in just over a week, and promised 200 bi
Published March 19, 2020
  • The central bank cut interest rates to 0.1%, its second emergency rate cut in just over a week, and promised 200 billion pounds of additional bond purchases, and at a much faster pace than normal.
  • "This (stimulus measures) will help at the margin, particularly the fiscal spend, if they can find a way to get the money to businesses and individuals," a fund manager at a UK- based asset manager said.

Britain's top shares ended a volatile session higher on Thursday after the Bank of England cut interest rates to a record low and ramped up its bond-buying programme in a bid to rescue the economy from the coronavirus crisis.

After wild swings earlier in the day, the blue-chip FTSE 100 rose 1.4%, with big dollar earners such as Diageo , Royal Dutch Shell and AstraZeneca providing the biggest boost, even as the pound recovered from a 35-year low.

The central bank cut interest rates to 0.1%, its second emergency rate cut in just over a week, and promised 200 billion pounds of additional bond purchases, and at a much faster pace than normal.

The moves follow similar drastic measures by other central banks and governments, including a 330 billion-pound stimulus package from the UK government earlier this week, to inject liquidity into markets and stem an economic slowdown, which many fear may have already pushed the global economy into a short slump.

"We would not be surprised if the BoE's announcement prepares the ground for more fiscal announcements soon," Citigroup's Christian Schulz wrote in a note.

"We expect further programmes to absorb households' income losses due to the COVID-19 crisis and eventually also stimulus and debt forgiveness for companies."

The announcement, however, failed to pull midcap stocks out of their misery. The FTSE Mid 250 index dropped 1.4% for its eleventh day of losses after Prime Minister Boris Johnson enforced tougher measures to contain the virus.

"This (stimulus measures) will help at the margin, particularly the fiscal spend, if they can find a way to get the money to businesses and individuals," a fund manager at a UK- based asset manager said.

"For confidence to meaningfully turn more positive, we need to see the rate of infection slow in Western markets."

Shares in homebuilder Crest Nicholson slumped 30% after it cancelled payment of its final dividend along with financial forecasts for 2020.

Fashion retailer Joules Group and gambling software maker Playtech also announced similar measures.

A leading ventilator manufacturer, Hamilton Medical, told Reuters that Britain faces a "massive shortage" of the ventilators that will be needed to treat critically ill patients suffering from coronavirus.

Luxury brand Burberry Group warned that sales in the final weeks of March would plunge by around 70% to 80% compared to last year.

Pub operator Young & Co's Brewery Plc fell 5.2% after it said that the closure of some or all of its pubs for at least a short period was "imminent".

Next rose 5.3% after the clothing retailer said it could sustain a hit from the coronavirus outbreak of more than 1 billion pounds ($1.2 billion) without exceeding its debt and bank facilities.

Comments

Comments are closed.